Park Ridge mayor vetoes contract, police station upgrades

Schmidt says improvements not a 'need,' but 'want'

April 16, 2013|By Jon Davis, Special to the Tribune

Just 24 hours after he was re-elected April 9, and less than a half-hour after Park Ridge aldermen unanimously approved the city's new $61.5 million budget, Mayor David Schmidt vowed to once again wield his veto pen.

Five days later, Schmidt carried out his threat to "absolutely, no question" veto about $360,000 for the second phase of the three-year, $1.2 million renovation of the city's police station, currently in the basement of City Hall at 505 Butler Place.

Schmidt also vetoed the recently approved three-year contract with Local 150 of the International Union of Operating Engineers.

In separate, prepared statements to the city council on April 15, Schmidt cited the city's still-fragile fiscal health in the new 2013-14 budget, which takes effect on May 1, as reason for his vetoes.

"There is nothing in phase two of the (police station) project that can be reasonably labeled as a 'need,' " Schmidt said, explaining why he vetoed all line items related to the project. "Rather, all of the planned modifications are clearly 'wants'. When we are grappling with a potential $15-$27 million drain on our general fund in the form of TIF Fund deficits, 'wants' must be set aside."

The general fund, which pays for basic services like fire, police and public works, is projected to end the coming fiscal year with a $700,000 surplus.

But the Uptown Tax Increment Financing District — the "elephant in the room," as Ald. Dan Knight called it — has a $1 million deficit for the new fiscal year, a hole that must be filled by the general fund. Officials expect that TIF deficit to grow in coming years because property-tax revenue within the district won't rise quickly enough to cover its debt.

The Uptown TIF district was created in September 2003 to spur redevelopment near Northwest Highway and Touhy Avenue. Debt was issued from 2004 to 2006, and was projected to be paid off by 2027. The district was paying its debt until the recession struck and torpedoed property values.

In a TIF district, property valuations are frozen in the year it's created. As property values keep rising, so do the property taxes paid. The difference in taxes paid between the baseline and current years — the increment — can be used to pay for public infrastructure improvements, land acquisition and other allowed costs. TIF districts expire after 23 years, or when their debt and other obligations are paid off — whichever comes first.

Schmidt said he vetoed the contract with Local 150, which represents 28 maintenance workers and mechanics in the public works department, because it was not expense-neutral despite city council instructions.

Under the agreement, which would be effective from May 1 to April 30 of 2015, salaries would be set in a range between $45,263 to $76,970, based on position and years of service. That range would gradually rise to between $46,861 and $79,636 in the contract's final year.

The net cost to the city would be $75,488 over those three years.

Aldermen are scheduled to vote on whether to sustain or override Schmidt's vetoes on May 6, before the new city council is sworn in and seated.

Ed Maher, a spokesman for Local 150, said Schmidt's veto was is "disappointing, though it's certainly not surprising with the amount of business that comes to his desk and is vetoed.

"We will be watching closely at the May 6 meeting because the city council was very supportive of these very modest increases," Maher said. "We hope they'll do the right thing on behalf of the city's workers."

As for the 2013-14 spending plan, the entire budget — general fund and special funds dedicated to single purposes like water, sewer construction, parking, etc. — is projected to take in $61,590,792 while spending $67,422,026, resulting in an overall deficit of $5,831,233.

Acting City Manager Shawn Hamilton said in his introductory letter, though, that about half of the deficit is due to the sewer construction fund, which pays for sewer repair and flood control work funded by city-issued bonds.

"I'm very happy; I'm very ecstatic with the product we've put out," Hamilton said on April 10. "We'll continue to look throughout the fiscal year for additional efficiencies."